A 'Thomson card' to transform banking

It could only happen in Australia. A small listed Australian public company has developed a technology to keep our politicians and public servants ‘honest’ in their spending.

But this is serious technology, which has much wider applications in cash disbursement and is a warning for bank shareholders.

In jest I will call it a ‘Craig Thomson’ card, remembering that the former union official is innocent until proven guilty.

Yesterday it was embraced by the Queensland government, which believes it will slash fraud by members of the public by tens of millions of dollars.

But the wider applications illustrate how new technologies will eat into traditional banking markets.

The man behind the ‘Craig Thomson’ card is Tom Cregan, who has made many tens of millions developing banking-style technologies and selling the businesses created to major global players wishing to enter or expand in the ’banking space’.

For this exercise, Cregan recruited former Bank of Queensland chief executive and Westpac Banking Corporation executive David Liddy to help propel the technology. Cregan’s public company, emerchants, has signed a five-year agreement with the Queensland government to become a preferred supplier of ‘prepaid card solutions’ to enable the government’s various arms to reduce the fraud that goes with its traditional funds disbursement mechanisms such as credit cards, cash and cheques. 

The emerchants system involves aid recipients, employees, contractors etc who need regular payments being given a card. That card can be loaded with cash daily or whenever required. But the number of places the cash can be spent can be restricted. So if a politician or employee was given money for accommodation the card could only be spent in specific hotels or eating houses. A person receiving aid might not be able to use the aid in gaming houses or liquor shops. Had the old baby bonus been distributed as such a card its expenditure could have been restricted to stores selling baby gear rather than being used to buy plasma TVs. The embattled politicians would be restricted from spending government money in places and ways that are not appropriate. The Salvation Army has begun distributing aid this way. A number of mining contractors are using the system to pay the expenses of employees.

Emerchants has a balance sheet from hell reflecting previous adventures. But Liddy and the Queensland government were prepared to ignore that balance sheet for the Cregan technology.

The ‘Craig Thomson card’ will not on its own transform banking. But Australian banks have become organisations now dedicated to large projects to maximise shareholder profits and dividends. Around the world people like Tom Cregan are developing technologies that slice out small parts of the market. And of course giants like Google and Amazon are looking hard at the Australian bank space. The ‘Thomson card’ is a sign of things to come.